The Southeast region of the United States brings to mind images of a quiet, easy-livin' agricultural mecca with crops such as tobacco and cotton. Now, those miles of cotton fields have given way to industrial parks sprouting manufacturing plants. And where there's manufacturing, there's plastics.
Processors, intent on supplying those large original equipment manufacturers locating in the Southeast, have responded by opening plants of their own to serve them.
``Ideally, OEMs would like to have all their suppliers nestled right around them,'' said Pete Thompson, director of sales and marketing for Lindstrom, Minn.-based Plastic Products Co. Inc., which recently opened a plant in Greenville, Tenn., to serve Maytag Corp.
Plastic Products survived Maytag's extensive supplier consolidation almost two years ago. The Maytag dishwasher division, Jackson Appliance Co. in Jackson, Tenn., awarded Plastics Products enough work to lure it to that area where the company built a 30,000-square-foot facility in nearby Greenville.
This is the second facility the firm has located in the South. Nine years ago it put a molding facility in Lebanon, Ky., to supply a major customer there.
The Southeast's recent successes in attracting the automo-tive industry to the region have several plastic components suppliers responding to that trend, which some say could threaten Michigan as the United States' automotive capital. Two foreign automakers, Bayerische Motoren Werke AG and Mercedes-Benz AG, have both taken on a Southern accent.
Sid Rains, vice president of sales and marketing for Van Dorn Demag Corp. in Strongsville, Ohio, said that the automo-tive industry in the Southeast is creating a proliferation of molding companies in that region.
BMW, with its new plant in Greenville, S.C., has proven to be a major draw for automotive suppliers. The company had even considered a supplier park on acreage owned by BMW to draw its suppliers close.
``We had a vision of a campus where our suppliers could locate next to our facility and we acquired a substantial amount of land to accommodate that,'' said Robert Hitt, BMW's manager of community relations. ``And while that's a lovely vision, there are some impractical aspects to it.''
Since most of BMW's suppliers also supply its competitors, it could seem to be a conflict of interest for the suppliers if they were residents of BMW's park. Also, using the land for suppliers' plants would limit BMW's ability to expand due to certain environmental permitting regulations.
``However, we strongly believe that with our participation in simultaneous engineering and just-in-time delivery, we need our major suppliers, our systems suppliers close to us,'' Hitt
BMW asked its Tier 1 suppliers to locate within a two-hour maximum drive of its plant, and so far, 12 suppliers, including two plastics processors, have responded to the request.
Lacks Enterprises Inc., with headquarters in Grand Rapids, Mich., recently ventured into the South. Lacks, with several Michigan locations, primarily serves the automotive industry with products such as wheel covers, grilles and side moldings for both domestic and foreign auto manufacturers.
In August, Lacks began pre-production operations in a 60,000-square-foot injection molding facility on a 20-acre site in Greenville to serve the fast-growing automotive industry in that region. The $10 million investment represents the company's first venture outside Michigan's boundaries.
Marty Fahey, spokesman for Lacks, said the company decided to put a plant in South Carolina for two reasons: the company began producing a stand-alone, ``shoot and ship'' product that did not need the support of the company's other operations; and the increased presence of the automotive industry in the Southeast dictated the company get closer to that market.
``We have customers in Kentucky and potential customers in other areas in the Southeast with companies such as BMW and Mercedes,'' said Fahey. ``It's the OEMs who are driving this trend.''
David Down, vice president of production for Rehau Inc., agrees.
Last year, Rehau broke ground on a 74-acre site in Cullman, Ala., for a $10 million plant to injection mold polypropylene bumpers for Mercedes-Benz, which plans a $300 million assembly plant in nearby Tuscaloosa. Rehau, based in Leesburg, Va., plans to be in production by 1996.
Down said Rehau located this particular plant near its market because of a need to comply with its customer's just-in-time requirements.
``Consequently, it was necessary to locate a plant there for that reason, and to optimize cost to manufacture,'' Down said.
However, he could not say that this will be the basis for the firm's new plants in the future, or a trend in the industry.
``It depends on the size of the market and customer base in a particular area,'' he said.
Complex Plastics Cos. Inc., headquartered in Boulder, Colo., put in its second facility in theSoutheast a year ago with a 35,000-square-foot plant in Memphis, Tenn., to serve Sharp Manufacturing Co., also in Memphis.
Two years ago, the firm purchased Wade Precision Plastics Inc. in Randleman, N.C., to give it a packaging presence in the Southeast.
Shipping loomed large as an issue in Complex's decision to go to Memphis, since it sends several truckloads of parts daily there from Houston.
In addition to Sharp, Complex plans to serve other area OEMs such as Brother International Corp., and the automotive and major appliance industries in the South. Many processors see their OEMs' markets shifting from the northern tier states to the Southeast.
A market center shift to the Southeast for the lawn and garden equipment industry lured Mequon, Wis.-based Kelch Corp., to locate a new, 28,000-square-foot injection molding facility in Lenoir, N.C. It produces steering wheels for lawn and garden equipment, and the marine and golf cart industries.
``We like to identify market centers and this particular center had shifted from Milwaukee, where it was 15 years ago, to Tennessee,'' said Sandy Scaccia, vice president of operations.
As the Southeast experiences growth, markets for certain consumer goods grow too. Gaining greater access to the growth market of the South is the reason behind Venture Packaging Inc.'s new $30 million plant in Anderson, S.C.
The Monroeville, Ohio-based company bought 37 acres at an industrial site on which it built a 169,000-square-foot building in its first phase of a planned two-phase construction project.
``It is an attractive market for us and we already had a presence there,'' said Vice President D. Craig Rathbun. ``We needed to be in the Southeast for better access to our market there.''
Venture injection molds PP and polyethylene tubs and buckets in sizes from 6 ounces to 5 gallons for the food industry.
One of Venture's criteria was to be located along an interstate highway for ease in transportation. The firm narrowed its search to the Interstate 85 corridor that runs between Charlotte, N.C., and Atlanta.
A year ago, 111 plastics processing companies responded to a survey conducted by the South Carolina Department of Commerce to determine site location preferences in the Southeast. More than one-third of the companies surveyed are located along the I-85 corridor.
Continental PET Technologies Inc., a blow molder of bottles for the food and soft drink industries, recently expanded its plant in Olive Branch, Miss. That plant, an older one inherited by the company when it bought out Continental Can Co., was the beginning of the firm's effort to strategically locate plants near its markets, according to Tom Rembke, general manager of marketing and sales at the firm's headquarters in Florence, Ky.
This year the firm built a 120,000-square-foot plant - its second in the Southeast - in Cartersville, Ga., to serve that market.
``Being close to our markets is important to us to help us reduce costs,'' said Rembke. ``Shipping plastic bottles around gets expensive because you're shipping a lot of air.''